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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Our life changed last year when we bought a rowhouse with a basement-level apartment. Seriously, the tax benefits are enormous. We essentially make $24K/year tax-free on the rent due to deductible depreciation and related expenses. Anything we pay to maintain the house we basically get an automatic 33% discount. If I need a new roof, I can deduct one-third of the cost against my rental income. Same with my property taxes, utilities (provided to my tenants), internet bill, and even my cable bill. Oh, we need a new laptop, which we use extensively to manage our property? Depreciate and deduct it.

It's just ridiculous how rigged our tax system is for real estate owners. This is the real government welfare.[/quote]

Uh.. have you talked to your accountant about this pp?[/quote]

Not the PP, but I am in the identical situation, and the PP is absolutely right. I do exactly the same thing as the PP with the basement rental in my DC rowhone and take all the same deductions. And, yes, I have an accountant.

The one thing to remember, though, is when you sell your row home you will be paying depreciation recapture tax at a 25% rate for 1/3 of your gain on the sale of your home PLUS capital gains taxes on that 1/3.  In other words, the IRS will treat 2/3 of your house as a personal residence subject to the exemption from capital gains taxes, but will consider 1/3 of your house to be the sale of an investment property.[/quote]

The rich don't sell, they bequeath. Or, do as the Trumps did, and get an under-valuation upon the transfer of the assets to heirs to minimize tax burden (which apparently is total legal).

It's absurd how rigged the tax game is for real estate owners.[/quote]

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